Related Content

Related Overviews

free trade

Adam Smith (1723—1790) moral philosopher and political economist



See all related overviews in Oxford Reference »


More Like This

Show all results sharing this subject:

  • History


Show Summary Details



Quick Reference

The 17th-century economic belief that aimed to exploit natural resources fully to promote exports and limit imports. Mercantilists believed that the possession of gold or ‘bullion’ was all-important and countries without a source of precious metal must obtain it by commerce; a nation's wealth was seen as chiefly dependent on its balance of trade. Trading was controlled by government-backed companies, tariffs were imposed, and trade wars, such as the Anglo-Dutch Wars were fought. Later supporters of free trade (laissez-faire) opposed the mercantilist theory that the volume of trade is fixed and that to increase one's share one must lessen that of others. In a celebrated essay of 1752, David Hume contradicted the mercantilist view, arguing that a country's bullion reserves were essentially determined by the size of its economy and its consequential need for money as a circulating medium, and would not be permanently influenced either way by government interference with trade.

Subjects: History

Reference entries

View all reference entries »